1

Unit Unit
Sales Sale Price Cost Revenue Cost
Ohio 2,300 $120 73.88 $276,000 $169,924
Michigan 1,468 $120 73.88 $176,160 $108,456
Purdue 890 $120 73.88 $106,800 $65,753
eBay 342 $50 60.88 $17,100 $20,821
Totals 5,000 $576,060 $364,954
Overhead:
Net Profit:

Venture capital 25%

Profit before taxes
Taxes 50%
Profit after tzxes

2
A big assumption here is that the forecasts at each school are independent and that they are not biased.

Average football Last Year’s Actual Rhonda’s forecast Steve’s forecast for Market research
game attendance Sales (full price) for next year next year forecast for next year
Ohio State 105,261 2,300 2,500 2,200 2,800
 Michigan 108,933 1,468 1,800 1,500 2,000
Purdue 50,457 890 1,000 900 1,100
Michigan State 74,741 -- 1,750 1,500 1,600
Indiana 41,833 -- 600 500 450

7,650 6,600 7,950

5
Supplier
Reduce the MOQ, Reduce lead time, multiple shippments
Using demestic supplier
Monogramming subcontractor
In-house, not outsource
Customers
Expand to other Big Ten teams, other sports.
Products
Consider other products
 3

Retail Price 120.00

eBay Price 50.00
Margin 人事費用 Supplier Cost 60.88
$106,076 設備租金 $20,000 Subcontractor Cost 13.00
$67,704 薪資 $50,000
$41,047 人數 2 Return / sweater 46.12
-$3,721 $120,000 10.88
$211,106
$120,000 The critical probability
$91,106
Quantity to order
$22,777 平均預測
$68,330 Order size for Ohio State 2,500
$34,165 Michigan 1,767
$34,165 Purdue 1,000
Michigan State 1,617
Indiana 517

Total order size

Sales

Ohio 2,500
Average forecast Standard Deviation CV % of forecast
2,500 300 12.0% 34% 300 Michigan 1,767
1,767 252 14.2% 24% 251.661147842358 Purdue 1,000
1,000 100 10.0% 14% 100 Michigan State 1,617
1,617 126 7.8% 22% 125.830573921179 Indiana 517
517 76 14.8% 7% eBay 366
Totals 7,767
7,400 185000

430

7,400 430 5.8%

Cost of underestimate C(u)
Cost of overestimate C(o)

0.809

7,776 =NORMINV(P11,H40,I40)

300 2,762
252 1,987
100 1,087
126 1,727
76 583

8,147

Difference 371

Unit Unit
Sale Price Cost Revenue Cost Margin

$120 73.88 $300,000 $184,700 $115,300

$120 73.88 $212,040 $130,546 $81,494

 $120 73.88 $120,000 $73,880 $46,120
$120 73.88 $194,040 $119,464 $74,576
$120 73.88 $62,040 $38,196 $23,844
$50 60.88 $18,300 $22,282 -$3,982
$906,420 $569,068 $337,352
Overhead: $161,000 161000
Net Profit: $176,352

Venture capital 25% $44,088

Profit before taxes $132,264
Taxes 50% $66,132
Profit after tzxes $66,132
 Last
Average Year’s Rhonda Market
football Actual ’s Steve’s research
game Sales forecast forecast forecast Standard
attendan (full for next for next for next Average Deviatio
ce price) year year year forecast n
Ohio Stat 105,261 2,300 2,500 2,200 2,800 2,500 300
Michigan 108,933 1,468 1,800 1,500 2,000 1,767 252
Purdue 50,457 890 1,000 900 1,100 1,000 100
Michigan 74,741 -- 1,750 1,500 1,600 1,617 126
Indiana 41,833 -- 600 500 450 517 76
Penn Stat 107,008
Wisconsin 80,109
Iowa 70,214
Illinois 59,545
Minnesota 50,805
Northwest 24,190
Nebraska 85,071
Total 4,658 7,650 6,600 7,950 7,400 430

Retail Pri 120.00

eBay Pric 50.00
Supplier C 60.88
Subcontra 13.00